Food Industry This Week – Opportunities & Acquisitions

Food Industry This Week – Opportunities & Acquisitions

Competition Motivates Pizza Hut to open new Outlets

Taking the cue from rival Domino’s; Pizza Hut is all set to open 100 outlets that will be modeled on the small format and will penetrate into smaller towns. Most of the outlets planned for the coming year will be on a downscaled delivery and dine-in format. Pizza hut is looking towards franchise partners who are quite upbeat about the delivery model and are willing to push the brand.

Pizza Hut spokesperson feels that smaller outlets are commercially more viable and that is why they are willing to shed their ‘fine-dining’ image to enter the more crowded areas. The move has also come in the wake of a reduction in footfalls as people reduced their expenditure on eating out due to rising expenses in the previous year.

Dow Packaging Looking to Penetrate Indian Flexible Packaging Market

Recently Dow Packaging and Specialty Plastics participated in PlastIndia 2015 in Gandhinagar. They showcased their broad range of food packaging, adhesives, consumer packaging and hygiene applications as they mean to enter the Indian packaging industry in a big way with PacXpert. The new technology offers an environmentally friendly storage solution and offers flexible packaging that converts large containers to portable packages for both fluid and solid storage and offers improved shipping and warehouse packaging solutions.

Dow Packaging and Specialty Plastics is the largest polythene producer in the world and have a presence in 16 countries. Since India is the third largest flexible packaging market in Asia the company is looking to drive growth by developing differential and innovative packaging. They hope to meet the evolving needs of the packaging industry along the value chain, including customers who are looking for convenience and functionality.

Growth in Market for Packaged Foods to Continue

According to a report on the Indian packaged food Industry Outlook to FY’2018 – Ready to Eat Snacks to Drive Future Growth’ lifestyle changes, busy schedules and growth in the female workforce have fuelled demands for convenience foods. This has propelled the growth of the packaged food industry. There is also an increasing demand for healthy and hygienically prepared food products particularly in urban areas where customers prefer packaged foods rather than foods sold open or loose.

The sectors that have contributed to the industry in a big way are ready to eat bakery products, confectionaries, snacks and ice creams. Parle, Britannia and ITC are major players in the biscuit market which has shown the maximum growth. Semi processed segments like noodles, breakfast cereals, instant soups and frozen foods are the biggest drivers. Among these breakfast cereals have seen the biggest demand followed by oats and porridge. Britannia Industries was the leader in the packaged food sector followed by Cadbury and Parle.

New Secretary for Health Ministry but no news about FSSAI Chairperson

Bhanu Pratap Sharma has been named the new secretary in the Union Ministry of Health and Family Welfare in a recent government reshuffle. The new secretary is a 1981 batch, IAS officer from the Bihar cadre. The food industry is waiting to know if he will also be given the additional charge of the FSSAI Chairperson as had been given to the previous incumbent. The new secretary is likely to continue with the additional charge as the Ministry has not yet found a suitable replacement for Mr. K Chandramouli who retired on 23 January.

The Health Minister had announced the formation of a Task Force to review the FSS Act. Since Lov Varma, the former Secretary, was leading the comprehensive review of the Food Safety and Standards Act, 2006, that the government is presently pursuing, the move was rather unexpected

Applebee Seeking Franchise Partner in India

One of the largest casual dining chains in the world, American Applebee is looking to enter the Indian restaurant market through a franchise partner. With a presence in over 15 countries worldwide and almost all the U.S. states Applebee is now targeting India. They are also waiting as they would like to get their timing for entering this market right.

Applebee is a DineEquity brand, since IHOP Corp. changed its name after they acquired Applebee International in 2007. Along with its affiliates, Applebee’s Services Inc. franchise and operate restaurants under Applebee’s Neighborhood Grill & Bar. They have an open kitchen which allows consumers to see how their food is being prepared in a clean environment with food safety norms in place. Their menu features its signature ‘riblet’ that is only available in their restaurants as also chicken, burgers, pasta and seafood.

Domino’s Pizza Grows in India

India has become the biggest market for Domino’s Pizza outside USA, worldwide. Domino’s has 844 restaurants in India across 185 cities. The reason for its success is the rich and balanced menu they provide. In Q3 FY 15, the company saw a healthy growth in their topline. They feel they have emerged winners as they invested in infrastructure and in the people so that they could serve their customers and have a competitive edge. Their marketing strategies have also paid off Jubilant FoodWorks Limited that runs Domino’s Pizza and Dunkin’Donuts in India say that their success is a result of company initiatives for long term growth which included expansion in restaurants and creating a new and varied menu. They have been successful in restoring their SSG as Domino’s saw 1.9% growth in Q3. They will continue to drive growth as they will penetrate into more cities in the coming year.

Rocket Internet Acquires Online Food Ordering and Delivery Business

Berlin based Rocket Internet is on an acquisition blitzkrieg which includes acquisition of an Indian firm. Rocket Internet has built a number of startups and has now focused its eye on the food delivery business worldwide through Foodpanda. In India Foodpanda works through Foodpanda.in and the company has now acquired ‘Just Eat’ so that it can strengthen its position in the online food delivery sector. Earlier Foodpanda had acquired subsidiaries and rivals of ‘Just Eat’ including the Pune based TastyKhana.

Just Eat would continue to operate as a separate brand. Foodpanda will now work in India in 200 cities and will partner with 12, 000 restaurants. This makes Foodpanda the sole player in the online food ordering segment with no competition for the time being. The food delivery business is likely to see an upsurge as people are now too busy to prepare their own food. India is an important market in this segment and Foodpanda has seen the potential.

Yum! Brands, Inc to Restudy Strategy after Setbacks

Yum! Brands, Inc has seen some setbacks across its three operations that include Pizza Hut, KFC and Taco Bells. Pizza Hut saw a decline in growth in America but the international market pulled it up as well as KFC. Taco Bells is the only banner that continues to fly high for Yum! Brands, mainly because of their breakfast segment.

In India the company opened 156 new restaurants which helped it to advance system sales for the year by 14% and 6% for the quarter. They had an operating loss of $9 million because of the decline in same store sales. To overcome the shortfall the company is planning innovations in all three brands like having a mobile ordering platform for Taco Bells. In India they are likely to change their franchise partners.